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Tomorrow is another Day

Tomorrow is another Day

Familiarity with
is high, but readiness remains low

This survey was sent to Chief Financial Officers (CFOs), finance managers, cash managers and treasurers of corporates and public administrations in euro countries representing 97% of transaction volume. In particular, the members of the European Association of Corporate Treasurers and its subsidiaries in each country were invited to participate in this online survey. The results of the survey are in line with the findings of other studies on the subject yet also provide insight into the reasons behind these findings and alternative ways to address the issues exposed.

The
Survey 2008 shows that across the euro countries investigated,
familiarity is high (84%), yet this does not translate into concrete action. Most respondents have not started a
team (79%) nor do they have a
strategy in place (80%). Most common reasons for this absence are that other projects currently have a higher priority (38%). Even though most corporates agree with the statement that
will have a major impact on daily payment processes (65%) and that
offers major business opportunities (60%), a large share is unable to quantify the needed investments (42%) and the potential benefit (48%). Most corporates are thus unable (or do not see the need) to build a
business case. The survey also found that 74% of respondents indicated that the
solution offered by a bank was not acceptable for their company. The latter finding may be partially explained by the fact that customers expect
solutions to work exactly like existing ones.
implementation, however, will require change also on the customer side.

Familiarity in this study is identified as having heard of through to having a good knowledge of the
project, e.g. familiarity is seen as the first phase towards
awareness and readiness.

Awareness of
is defined as being well informed about
and acknowledging the impact
has on payment processes, as well as being able to quantify and/or identify the potential costs and benefits that come with
.

Readiness for
is defined as having started or completed concrete actions in order to comply with the changing payments landscape. Ultimately, a corporate is only fully
ready when all its current euro-domestic electronic payments are
payments.

In addition, the
Survey 2008 found that
is not a prime topic of interest among corporate leaders, which seems to be caused by the lack of a sense of urgency due to the following perceptions:

The current situation for payments is better than what
promises or is considered good enough.

The current
services do not yet cover all payment instruments.

Payments as an organisational process within a corporate is always considered critical but hardly ever considered core business. In other words, without a clear incentive, other projects will always have priority.

There are currently no direct consequences for enterprises and public administrations that do not act on
(failure to prepare does not involve breach of regulation).

How to create a sense of
urgency

The essential question, therefore, ishow to createa
sense of urgency on the customer side. This can be done by emphasising the benefits of implementation or, alternatively, by focusing on the risks of failing to implement or by simply enforcing
. Possible measures, among others, to increase the sense of urgency are:

Enforce implementation by some form of regulation (making the use of IBAN mandatory, for example).

Ensure timely adoption of the Payment Services Directive (PSD) in
member states and availability of the
Direct Debit.

Set an end date for domestic payment schemes.

Improve the
product offerings for corporates to make a more compelling case.

Communicate clearly the benefits and implications of
on an individual corporate level.

The first step: establish a dedicated
team

Most importantly, corporates should become more proactive. As such, they should identify the implications of
and prepare in a timely fashion to stay in control of the process. The findings of the
Survey 2008 confirm that preparedness translates into motivation for change on the customer side. Those corporates that have started a dedicated
team (compared to corporates without a
team in place) anticipate an even greater impact from
on daily payment processes yet also see more business opportunities. They are far better able to quantify the necessary investments and potential benefits,and are more ready to process
payments.

Further dialogue between all actors in the
process should therefore focus on developing means designed to increase the motivation of corporate decision-makers to actively address the
subject.

The cross sector analysis of the survey also shows that the public sector is under-performing most other sectors regarding the level of
familiarity, awareness and readiness. Apart from the political obligation that public organisations have to adopt
at an early stage, their engagement is also essential towards creating critical mass, since public organisations traditionally take a substantial share of total electronic payment volumes. The next issue of the
Newsletter to be released in April 2009 will feature detailed reports on the state of
readiness of the public sector.

Taco de Vries and Eddy Ouwendijk are the authors of the
Survey 2008. Mr de Vries is a principal consultant at Atos Consulting; Mr Ouwendijk is a senior manager at Deloitte.

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In this article

The Single Euro Payments Area (
) started as a political vision which the European banking industry turned into tangible
payment schemes and frameworks. The key to success, however, is in market adoption, e.g. implementation of
on the customer side. Enthusiasm among customers as measured by current
transaction volumes is still limited - despite the fact that
is intended to benefit the users of payments services in general and (multinational) corporates in particular. Investigating the level of market uptake, Atos Consulting and Deloitte published their yearly survey on
migration: The
Survey 2008 - a study on the awareness of and readiness for
amongst corporates and public organisations in the euro area. In essence, the survey finds that the corporate community still lacks a sense of urgency as regards
implementation.